WB approves $500m programme to help boost India’s MSME sector

8 June, 2021 12:00 AM printer

WASHINGTON: The World Bank’s Board of Executive Directors has approved a USD 500 million program to support India’s nationwide initiative to revitalise the MSME sector, which has been heavily impacted by the COVID-19 crisis.

According to a statement released last Friday, the program targets improvements in the performance of 555,000 MSMEs and is expected to mobilise financing of USD 15.5 billion, as part of the government’s USD 3.4 billion MSME Competitiveness - A Post-COVID Resilience and Recovery Programme (MCRRP), report agencies.

The USD 500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) Program is the World Bank’s second intervention in this sector, the first being the USD 750 million MSME Emergency Response Program, approved in July 2020 to address the immediate liquidity and credit needs of millions of viable MSMEs severely impacted by the ongoing COVID-19 pandemic.

“To date, 5 million firms have accessed finance from the government program. With the program approved today, the World Bank’s financing towards improving the productivity and financial viability of the MSME sector amounts to USD 1.25 billion over the past year,” the statement said.

“Having supported the immediate liquidity and credit needs of viable MSMEs in the first phase, the RAMP Program will support the Government of India’s efforts to increase MSME productivity and financing in the economic recovery phase, crowd in private sector financing in the medium term, and tackle long-standing financial sector issues that are holding back the growth of the MSME sector,” it added.

According to the release, the MSME sector is the backbone of the country’s economy, contributing 30 percent of India’s GDP and 40 percent of exports. Out of some 58 million MSMEs in India, more than 40 percent lack access to formal sources of finance.


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